Every country that is doing business with China is having issues with China wanting their intellectual property. Kia is no different. Kia wants to take electric vehicles into China, but not with Korean batteries, with Chinese batteries. Access into China, for all companies, means greater market access, but at what price?
The World Trade Organization (WTO) has been receiving complaints about China concerning certain measures pertaining to the protection and enforcement of intellectual property rights in China. Kia has reason to be concerned. Dispute DS362 has been on the books since 2007 and now includes Argentina; Australia; Brazil; Canada; European Union; India; Japan; Korea, Republic of; Mexico; Chinese Taipei; Thailand; Turkey and the United States. All of these countries take issue with China and their concerns over intellectual property.
John Batchelor, host of the John Batchelor radio show, and Lou Ann Hammond, CEO, drivingthenation.com, discuss this dispute.
In 2001, ten years ago, during the Frankfurt auto show, America was attacked. The world was in shock. No one could move away from their television. Shopping was at a standstill. It was General Motors that instituted “Keep America Rolling”, followed by other car companies. General Motors was credited with bringing back the economy by bringing out zero percent financing on their vehicles.
Seven years later, after the mortgage meltdown, General Motors needed assistance from the government. The Government gave it to GM. But there was a caveat. That money was to keep GM-USA alive. That money was not allow to go outside of the United States.
On the other side of the world GM-China was almost ready to go into India and Thailand. They needed just a little bit more money. But the parent company, GM-USA, couldn’t give it to them. And all of GM-China’s profit’s went to GM-USA first, then back to GM-China. Because of this caveat no money could leave the country to help any other part of the company.
GM-China’s only recourse was to sell it’s one percent controlling interest in GM-China to it’s partner, SAIC. Nick Reilly, who heads GM in Europe, used to work in GM-China. Reilly said that SAIC will allow GM-China to buy the one percent back. It is in the works.
How is GM-Europe doing financially?